Every September, Medicare recipients receive an Annual Notice of Change for their Medicare Plans. That’s because every January, coverage and costs change. Whether you are enrolled in a Medicare Part D prescription drug plan or a Medicare Advantage plan, this letter contains the details on premiums, deductibles, and co-pays from 2024 and what’s coming in 2025.
Be prepared for changes. Health insurance companies’ response to the $2,000 out-of-pocket cap on prescription drugs for 2025 is expected to create more costs for seniors, including higher premiums, higher deductions, and significantly higher co-pays. Certain prescriptions may not be covered at all.
Medicare Advantage plans are feeling the pinch of lowered profits already and if your MA plan includes Part D coverage, be prepared for benefits to be trimmed or eliminated as these companies try to keep the $0 premium intact. Features like gym memberships, vision and dental coverage may evaporate in 2025 also. Some plans may be closing.
If you’re on Medicare Advantage, the Notice of Change will tell you if your doctors and hospitals are still in the plan network.
Note you won’t get any similar letter from Medigap plans, as they don’t usually have any big changes from year to year.
The Annual Notice from your Part D plan will tell you whether or not your prescriptions will be covered and what your costs will be.
What to Do When the Annual Notice Arrives
If you’ve never read these letters in the past because they aren’t written in clear English, you’re not alone. Most recipients find the Annual Notice challenging to understand. But this year, you’ll need to take the time to read the letter and give it the attention it requires. You’ll want to find out if you will need to change your coverage options.
You have an eight-week open enrollment period (October 15 – December 7) when you can make changes with no penalties.
A few tips:
If the premium increase is modest but overall, you’re happy with the plan and it covers your prescriptions, you may not want to rush to make a change.
If your doctors and/or hospital isn’t in the network, you’ll definitely need to make a change. The MA plan has a legal duty to identify other doctors or hospitals to people, but it may take some work on your part to get this done.
In an effort to prevent drastic Part D premium increases, the Centers for Medicare and Medicaid Services decided to provide a special subsidy – a “premium stabilization plan” in an attempt to moderate the possibility of over-the-top premium increases.
Change is always unsettling, and the prospect of increasing healthcare costs is always challenging for retirees. We’re here to help if you have questions.
Reference: Fortune (August 26, 2024) “Why this year’s Medicare Annual Notice of Change will be vital reading for beneficiaries”